Types of Mutual Funds in India with Examples

In this article we will learn that what is  Mutual Funds? What are the benefits of Mutual Funds? Should you invest money in mutual funds? In this article, we will learn about many types of mutual funds in India with examples. I will give you complete information about Mutual Funds but you have to read this article completely. When you have read this article completely, then you will get complete information about Mutual Funds.

Types of mutual funds in India with examples.

 types of mutual funds in India with examples

What is Mutual Funds?

 Mutual Funds consist of two words: Mutual + Funds = Mutual Funds

Mutual fund means Common Fund. Mutual Fund is nothing else but this is a fund where the money of many people is kept in one place. We collect this money as the AUM – ASSET UNDER MANAGEMENT of that mutual fund.

After that, the funds collected are invested in the best places. So that we can get maximum returns. Professionals to manage every mutual fund, which we also call fund manager. The fund manager makes the decision of where to invest the funds collected in mutual funds and how much to invest.

Mutual Funds on two grounds:

1.Asset

There are 3 types of mutual funds based on Assets.

A. Equity

These are Mutual Funds that are invested in the Stock Market. If you want your money to be invested in the shares of good companies, then you can invest in Equity mutual funds.

B. Debt

Such mutual funds usually invest in government bonds or treasury balances. If you want your money to be invested in Shares, you can invest in Debt mutual fund.

Risk – Debt mutual fund <Equity Mutual fund

C. Hybrid

These are Mutual Funds that invest in both equity and debt. If you want to have some of your money in shares and some bonds, then you can invest in Hybrid Mutual Funds.

Risk / Return

Debt mutual fund <Hybrid Mutual Funds <Equity Mutual fund

Friends, there were three types of mutual funds based on assets.

types of mutual funds in India with examples

 types of mutual funds in India with examples

2. There are 3 types of Mutual Funds Structure.

A. Open ended

These are Mutual Funds in which we can invest and sell anytime.

B. Closed ended

We can invest only in the beginning in such mutual funds. After that until the terms of Mutual Funds are over. Till then neither can we invest it in it nor can we sell it.

C. Interval

In such Mutual Funds, we can invest and sell only after a particular time interval. And this interval dissuades mutual funds. After the interval is over, we can neither invest in it nor sell it.

Qualification for Bank Manager in India

types of mutual funds in India with examples

History of Mutual Funds in India

A Develop Economy requires a strong financial market with business participation. With this objective, India’s first Mutual Funds were launched in 1963 on the joint aspect of UTI, Government of India and RBI (RBI). There has been a lot of disruption in the mutual fund industry in the last few years. In India’s history, mutual funds are seen in five parts:

First phase 1964 – 1987

The first phase of Mutual Funds in India is considered to be 1964 – 1987. The Mutual Funds Industry in India started with an UTI in 1963 by an Act of the Indian Parliament. And work started under the control of RBI’s Rules and Regulations. The unit scheme 1964 was the first scheme introduced by UTI. At the end of 1988, UTI Mutual Funds in India had ₹ 6700 crores.

Second phase 1987 – 1993

The second phase of mutual funds in India can be traced to 1987. In 1987, Banks and Life Insurance Corporation of India (LIC) General Insurance Corporation of India started Mutual Funds for the Public Sector in the public sector.

SBI mutual fund was established in June 1987. And it was the first Non UTI mutual fund. After which came many mutual funds like Punjab National Bank Mutual Funds, Indian Bank Mutual Fund. Lic started its mutual fund in June 1989. In 1993 Mutual Funds had an AUM (asset unit management) of ₹ 47004 crore. types of mutual funds in India with examples

3rd phase 1993 – 2003

The 3rd phase of Mutual Funds in India lasted from 1993 to 2003. Talking about the history of mutual fund, a new history of mutual funds started in 1993. Because before that all Mutual Funds agency used to work inside UTI Mutual Fund.

But in 1993 SEBI (Securities and Exchange Board of India) became stylish. After its arrival, now all mutual funds had to follow its rules and regulations. The Mutual Fund Regulation Act 1993 was introduced by SEBI to develop and regulate the market of Mutual Funds in an organizational manner. And private sector banks were also exempted from mutual fund scheme.

Changes were made in this act of 1993 and later in 1996 the Mutual Fund Regulation Act 1996. If you talk about the business of Mutual Funds Organization. So by the end of the year 2003 a total of 33 Mutual Funds Organization were functioning. Whose business had crossed 1 lakh 22 thousand cores.

4th phase 2003 – 2014

Now let’s talk about the 4th phase. After the end of the UTI Mutual Fund Act 1963 in February 2003. Unit Trust of India was divided into two separate entities.

The financial market hit an all-time low level in the 2019 financial crisis. And the Indian market also could not escape this. Most marketers lost money due to the down fall of the market. They had suffered a lot. The Indian mutual funds industry struggled to overcome this problem. And remade myself in the next 2 years.

5th phase 2014 – Now Days

Phase 5 commenced since 2014. SEBI has activated a number of progressive rules in September 2012, in order to make people aware of Mutual Funds in the Tier 2 and Tier 3 cities in India and keeping in mind the security of the investor.

These rules of SEBI were helpful in developing the Indian Mutual Fund market. Since May 2014, the Indian mutual fund market has written a new history of low-entry AUM as well as investor’s progress. All asset management companies in the future manage assets worth about Rs 23 lakh crore.

Specialists say that Indian investors have started converting a portion of their savings into mathematic positions such as gold’s and property to financial instrument bonds and silver. However, AMFI and the government need to incur even more Indian scores to invest Mutual Funds.

So friends, this was the history of Mutual Funds, now we will see what are the benefits of Mutual Funds?

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types of mutual funds in India with examples

What benefits do we have from mutual funds?

We can invest in good companies by investing in mutual funds. Want to earn maximum money by planting. So that we can get maximum return on our investment.

Investing in mutual funds is very less risky than investing in the stock market. Because fund managers are more intelligent and experienced than us. Their effort is how to make maximum profit and they manage the risk very well.

Friends, it is in our hands that we can manage risks and returns and choose a good Mutual Funds. Then you can invest in it. And if we invest on it for a long time, we can also earn good money from it.

Conclusion

Friends, in this article today, we learned “What is Mutual Funds”. What are the types of mutual funds in India with examples. What are the profits we get from Mutual Funds?.What are the things that we should keep in mind before investing money in mutual funds? Which is a mutual fund that has more or less risk and return? So friends, how did you like our article today, you must tell us in the comment section below, if you like it, then share it with your friends too.

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